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Best Loans for Auto Repairs

Here's how to get a personal loan to fix your car, and what to consider before taking out a loan.

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Have you ever needed to make repairs on your car but didn’t have enough cash on hand? Car troubles can be a nuisance, especially if you need your car to commute to work and run daily errands. 

Car repairs also aren’t cheap, which is why some people consider taking out an auto repair loan to cover the costs. It’s a convenient way to quickly pay for vehicle repairs when cash is tight. But like most personal loans, it comes at a cost.

Learn more about car repair loans, alternative financing options, and whether a personal loan is the right choice for your vehicle repairs. 

What Is a Car Repair Loan?

car in mechanic shop

A car repair loan is simply a personal loan that you can use to pay for auto repairs. A personal loan can be used for nearly any purpose, including to finance repairs on a vehicle. While some lenders may market personal loans for specific purposes like weddings or home improvements, in reality, they are all the same type of loan that can be used for many purposes. 

Using a personal loan for car repairs can provide a quick way to cover repair expenses if you don’t have the money saved up. These loans are usually unsecured and offered at a fixed rate, so you can easily budget for the monthly payments.

Best Auto Repair Loans

Loan results will vary based on creditworthiness, loan purpose, loan amount, and other factors.

Best for Bad Credit


  • Loan Amount: $2,000 – $35,000
  • APR Range: 9.95% – 35.99%
  • Loan Terms: 2 – 5 years
  • Credit Score: 580 or higher

Avant offers small personal loans that are accessible to borrowers with fair credit, with funding available as soon as the next day.

  • Loan terms up to 60 months
  • Low minimum credit score requirement
  • Flexible payment due date
  • Next day funding available
  • No physical locations
  • Origination fee of up to 4.75%
  • Relatively low maximum loan amount ($35,000)
  • High minimum APR
  • No joint applicant or co-signer

Avant is known for its personal loans, which offer terms as long as 60 months. Customers can borrow up to $35,000 that can be used for a wide range of purposes, and funding can be completed as soon as the next business day once approved. The minimum APRs tend to be higher than competitors, but the maximum APR is comparable to other online lenders.

A unique feature offered by Avant is their flexible payment due date which allows a 10-day grace period without incurring a late fee.

While some lenders have credit score requirements in the mid-600s, Avant indicates it may approve borrowers with a 580 credit score.

Best for Good Credit


  • Loan Amount: $5,000 – $100,000
  • APR Range: 7.99% – 23.43%
  • Loan Terms: 2 – 7 years
  • Credit Score: 680 or higher

SoFi is an online lender known for its lack of fees and high loan maximum.

  • No origination fees and no late fees
  • Loans up to $100,000
  • Unemployment protection available
  • Rate discounts
  • Co-borrower allowed
  • No physical branches
  • High minimum loan amount

SoFi offers a competitive personal loan product that boasts no origination fees, no late fees, and a high maximum loan amount of $100,000. SoFi is one of only a handful of lenders offering loans as large as $100,000. If you need a substantial loan to cover a considerable expense, like a home renovation, SoFi’s high maximum can be a strong option. Its repayment terms range from 24 to 84 months.

One standout feature of SoFi is that it offers unemployment protection, which might allow you to pause payments if you lose your job. This is a unique offering that sets it apart from competitors.

SoFi also lets you view your rate without impacting your credit score. While doing a soft credit pull is relatively common, it’s still worth mentioning because some lenders require a hard inquiry before they provide a rate. Those who decide to formally apply will likely need a strong credit score to get approved for a SoFi personal loan. 

Best for Minimal or No Credit


  • Loan Amount: $1,000 – $50,000
  • APR Range: 6.50% – 35.99%
  • Loan Terms: 3 – 5 years
  • Credit Score: 300 or higher

Using artificial intelligence to help evaluate borrowers, Upstart is a unique lending platform that looks beyond your credit score for personal loan approval.

  • Considers factors beyond your credit score in lending decisions
  • Loans up to $50,000
  • Fast funding time
  • No physical locations
  • Limited repayment terms
  • Has origination fees of 0% to 10%

Upstart is a first-of-its-kind online lending platform that uses artificial intelligence to help make smarter lending decisions. This means the company considers factors beyond a borrower’s credit score to help determine creditworthiness. Upstart indicates its model has resulted in 43% lower rates for borrowers than traditional credit score models.

Beyond your credit score, Upstart will also look at your employment history, income, and level of education when deciding whether to approve you for a loan. it states that borrowers with credit scores as low as 300 might be able to get approved for a personal loan, though that loan may come with a relatively high APR. 

Those seeking a personal loan can borrow up to $50,000 and as little as $1,000. While its repayment terms of 36 or 60 months are fairly limited compared to other online lenders, its rates are fairly competitive and loan funds are disbursed as soon as one business day after approval. In addition, this lender charges origination fees of 0% to 10%, so it’s important to read the fine print before applying.

Best for Small Loans

PenFed Credit Union

  • Loan Amount: $600 – $50,000
  • APR Range: 7.74% – 17.99%
  • Loan Terms: 1 – 5 years
  • Credit Score: 660 or higher

PenFed offers no fees and small personal loans as low as $600.

  • Pre-qualification is available
  • No origination fee, hidden fees, or prepayment penalties
  • Borrow as little as $600
  • Allows co-borrower
  • Must be a member to receive the loan
  • Limited customization on payment plans
  • No option for direct payment to creditors for debt consolidation

Penfed is an established credit union founded in 1935 and headquartered in McLean, Virginia. While you will need to become a Penfed member if you decide to get a personal loan there, anyone can apply for membership and the process is quick and simple. 

Many lenders have relatively high minimum loan amounts of $1,000 or $2,000, which isn’t ideal if you’d like to borrow a small amount to cover an unexpected cost. Unlike some competitors, Penfed offers loans as small as $600 (or up to $50,000), with no origination fees and APRs ranging from 7.74% to 17.99%. Borrowers can get repayment terms as long as 60 months. 

If you’d like to view personal loan rates with Penfed, you can do so without impacting your credit score. While this lender doesn’t disclose a minimum credit score requirement, you’ll likely need a credit score in the mid-600s to get approved for a personal loan. 

Best for Fast Funding


  • Loan Amount: $2,000 – $40,000
  • APR Range: 6.99% – 35.99%
  • Loan Terms: 3 – 5 years
  • Credit Score: 640 or higher

Prosper is an online lending platform offering fast funding for personal loans and the option to apply with a co-borrower if your credit isn’t stellar.

  • Can change your loan payment date
  • Option to apply with co-borrower
  • Next-day funding available after approval
  • No physical branches
  • Has origination fees of 2.4% to 5%

Founded in 2005, Prosper is an online peer-to-peer (P2P) lending platform offering personal loans, HELOCs, and credit cards. Because it’s P2P, Prosper works slightly differently than other non-P2P lenders. Borrowers sign up and are assigned a Prosper Rating based on their creditworthiness, and investors can choose whether or not to fund them after viewing their loan listing.

Eligible borrowers seeking personal loans can get up to $40,000 through Prosper with 3- or 5-year repayment terms. Borrowers can expect to pay an origination fee of 2.4% to 5% depending on their Prosper Rating. Funding can be available as soon as the next business day after approval of the loan, making it a solid option in emergencies.

Fortunately, if your credit isn’t stellar, Prosper offers the option to apply with a co-borrower, which could improve your chances of getting a better rate.

What Can Auto Repair Loans Be Used for?

Car owners can use auto repair loans when they don’t have cash upfront to pay for repairs. Perhaps their warranty expired or their insurance doesn’t cover the needed repairs. Auto repair loans also offer a way to pay these expenses quickly when you need emergency funding for urgent situations. 

Auto repair loans can cover a variety of expenses, including:

  • Maintenance services to fix a car’s wear-and-tear
  • Replacement parts
  • New paint job
  • Broken windshield and windows
  • New tires
  • Brake replacement
  • Vehicle upgrades, such as a new sound system or rims
  • Accident damage not covered by insurance

If you rely on your personal vehicle to go to work, then it’s ideal to get repairs handled as soon as possible. Funding for auto repair loans can be relatively quick, with most lenders offering funding within a few business days, while some lenders can even offer next-day funding after approval.

Pros and Cons of an Auto Repair Loan

When deciding whether an auto repair loan is a good choice, consider the advantages and disadvantages of this financing option. 


  • Fixed interest rates: Car repair loans do charge interest, but the good news is that most banks or lenders offer fixed interest rates. This makes it easier to manage your monthly payments, because you’ll know exactly how much you’ll owe every month.
  • Funding can be quick: Many banks and online lenders offer simple online applications that can be done in minutes. Once approved, the money can make it into your bank account within several days. Some lenders may even offer same-day or next-day funding once you’re approved.
  • Avoid dipping into savings: Taking out a loan means you can set aside your savings for other more urgent needs, such as a medical emergency or to keep a roof over your head.


  • Need good credit for a low rate: Not everyone will qualify for a low rate, as your rate will depend on your creditworthiness and other factors. The interest charges could be higher for borrowers with bad credit history.  
  • Can be expensive: The cost of an auto repair loan is the interest on top of other personal loan fees, such as origination fees or any late fees if you miss payments. Factor in whether you can afford to repay the loan and if the cost is worth it.
  • Adds to debt: If you are already paying off credit card debt, adding another loan can increase your debt burden. If you fail to repay your auto repair loan, you could accumulate late payment penalties, which could put you in more debt.  

Choosing a Car Repair Loan

woman driving a car

If you’ve decided that a car repair loan is a good fit, here are some important factors to consider when choosing a loan:

  • Your qualifications: Loan eligibility varies by lender, but one of the most important factors will be a borrower’s creditworthiness. Many lenders require a minimum credit score, and some even have minimum income requirements. Check a lender’s requirements to see if you meet their qualifications. It’s a good idea to get prequalified with multiple lenders so you can compare rates and terms without hurting your credit score.
  • Loan amount: Certain lenders have loan minimums and maximums, so you have to look for a lender that can offer the amount that you need based on your eligibility.
  • Secured or unsecured loan: While most personal loans are unsecured, some banks or lenders offer a secured option for auto repair loans, which could require you to put up your car as collateral. This setup is risky, as banks could repossess your vehicle if you fail to repay your loan. 
  • APR: The APR includes all the interest and fees, so compare APRs across lenders to find one that can offer you the best rates.
  • Repayment term: The repayment term refers to the number of months (or years) you’ll repay your car repair loan. A longer repayment term means a lower monthly payment, but you end up paying more interest ovreall. On the other hand, a shorter repayment term means higher monthly payments, but you pay less in interest.
  • Fees and penalties: Carefully review the fine print of your loan agreement for any fees that you will be charged. For example, most personal loans come with origination fees that are usually a percentage of the loan amount and may be deducted from your loan total (so you’ll need to request a higher loan amount). In addition, look out for late fees, prepayment penalties, and other fees. 

How to Apply for a Car Repair Loan

If you have gone through the pros and cons and you think that getting an auto repair loan is a good fit to finance your car repairs, here is how to get started:

  • Request an auto repair estimate: Go to an auto repair shop and request an estimate on your car repairs. This will give you a better idea of how much money you’ll need to borrow.
  • Get prequalified: Go through the prequalification process with multiple lenders. This can often be done within minutes online, and you’ll be able to see your estimated interest rate and loan terms from different banks or lenders. Your credit score will not be affected because most lenders conduct a soft credit check during the prequalification process.
  • Compare offers: Review your offers and choose one with the best loan terms for you. Factor in the rates, loan fees, repayment period, and how much you’ll be paying per month to decide the best loan offer. 
  • Gather documents: Prepare documents such as tax returns, pay stubs, and other proof of employment or income as needed by lenders. A lender may request additional information, so be on the lookout for those requests.
  • Apply with a lender: Fill out the personal loan application form and submit your documents. 
  • Receive funds: Once approved, you’ll complete the process by signing the loan agreement and funds can be deposited into your bank account within several days. 

Other Financing Alternatives

If you’re not keen on the idea of an auto repair loan, here are some other financing alternatives worth exploring.

0% Intro APR Credit Cards

Some credit cards come with a 0% intro Annual Percentage Rate (APR), where you pay no interest on your purchases during the promotional period. This is essentially an interest-free loan that you can use to pay for your car repairs. Check out some 0% intro APR card offers.

Payment Plans from Auto Repair Shops

Ask your mechanic or shop to see if they offer payment plans to help finance your auto repair. Some shops may have promotions or discounts for your repairs, or they may partner with a lending institution to offer a low-interest or no-interest introductory rate. Just be sure you are aware of any fees or fine print that may end up costing you more than a personal loan would.

Borrow from Family Members or Friends

If you have relatives or friends who can afford to lend you enough money to cover your car repair expenses, then ask if they are willing to offer you a loan. Put your payment plan and terms in writing to avoid conflicts or damage to your relationships.

Does an Auto Repair Loan Make Sense for You?

If you don’t have any savings or don’t want to deplete your emergency fund, getting an auto repair loan is a helpful option to pay for your car repairs quickly. You’ll need to make sure you can afford the monthly payments and that you qualify for a low rate to make it worth it. Start by comparing loan offers and reviewing all the loan terms before making a decision. 

Otherwise, if you can qualify for a 0% intro APR credit card or secure a loan from family or friends, you’ll likely save more overall by not having to pay interest.


Can you get an auto repair loan if you have bad credit?

There are banks or lenders that will still offer you an auto repair loan if you have bad credit, but you’ll likely face higher rates or be asked to bring on a co-signer or co-borrower — possibly a family member or friend with good credit — to apply for the loan with you. If you fail to repay your loan, a co-signer or co-borrower has the responsibility of repaying your loan’s outstanding balance.

Where can you get an auto repair loan?

Most banks, credit unions, and online lenders offer personal loans for auto repairs. The loan amount and interest rates vary per lender, so compare their offers to find the best fit for you.

Is using an auto repair loan better than a credit card?

If your credit card offers a 0% intro APR on your purchases, you’ll save money not having to pay interest as long as you pay off the entire balance before the promotional period ends.

How much can you borrow with an auto repair loan?

Some banks or lenders offer a maximum of $100,000 in auto repair loans, although the maximum amount you could borrow will depend on how much you qualify for.

While we work hard on our research, we do not always provide a complete listing of all available offers from credit-card companies and banks. And because offers can change, we cannot guarantee that our information will always be up to date, so we encourage you to verify all the terms and conditions of any financial product before you apply.

Slickdeals Staff
Slickdeals Staff
The Slickdeals Money editorial team is dedicated to helping readers navigate the personal finance space. Our team boasts decades of knowledge on credit cards, banking, travel points & miles, personal loans and more. We’re passionate about educating our readers on the very best financial tools & products on the market today.

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